Fed approves Citizens' proposed acquisition of Investors Bancorp

The Federal Reserve Board approved the application by Providence, R.I.-based Citizens Financial Group Inc. to acquire Short Hills, N.J.-based Investors Bancorp Inc., the parent company of Investors Bank.

Under the terms of the deal, Investors Bank will be merged with and into Citizens Financial Group's subsidiary bank, Citizens Bank NA, following the proposed merger. Investors Bancorp shareholders will receive 0.297 of a Citizens Financial Group common share and $1.46 in cash for each Investors Bancorp share they own.

To incorporate the effects of the acquisition into Citizens Financial Group's capital requirements, the Federal Reserve Board will use the 2023 stress test to recalculate the company's stress capital buffer.

Citizens Financial Group is normally on a two-year stress test cycle and will receive a new stress capital buffer in 2022. The additional 2023 recalculation is being required because this year's test will not include the effects of the transaction, according to a news release.